NFL franchise values list released

[PromoTheRobot]

Forbe's list of NFL franchise values

 

The list is out and as expected the Buffalo Bills are near the bottom: 27th out of 32 NFL teams.

 

Now I'm not an economist or an MBA. Maybe someone else here can help dissect the numbers better, especially if I'm barking up the wrong tree. But If you look past the Forbes list of values and look at debt value, operating revenue, and operating income, the Bills appear to be one of the more robust teams in the league!

 

For example:

>The Bills are #6 in operating income, thanks to a low level of debt (ranks 5th lowest). Forbes does not indicate if Toronto monies are included in this figure. I'm going to assume not. So if you add the expected $7.8M annually, that brings the Bills up from $34.6M to $42.4M...which puts them at #3!! (Oakland #2 @ $46.2M, Dallas #1 @ $66.0M.)

 

>The Bills are tied at #7 with 6 other teams for growth in value, 9% in 2008. The NFL average is 6.9% growth. The teams that had the highest growth have or are building new stadiums.

 

>If you add $7.8M from Toronto, the Bills have virtually the same revenue as the Jets and Giants, but have considerably more operating income!

 

>The Bills rank 5th from the bottom, tied with 4 other teams for lowest revenue. However they are only 15% below the league revenue average of $204.3M. Again if we add $7.8M, the Bills revenue increases to $196.8M, good for #14!

 

So if I'm reading these numbers correctly, Buffalo is no where near as bad an NFL market as the media makes us out to be. While we aren't swimming in cash, the Bills seem to be in the middle of the pack revenue-wise, at least when Toronto monies are added in.

 

One more point: the present valuation is $821M, 15% below the NFL average of $957.4M. But the Bills are one of the more profitable franchises in the NFL. Debt seems to be the key. And the question is can a new owner carry a large debt load and still be profitable in Buffalo? Maybe, maybe not. But looking at the Jets and Giants, who currently carry the largest debt loads in the NFL, they barely make a profit even being in TV market #1. So would a new owner even be able to make a profit if the Bills were moved anywhere?

 

Again, anyone with more knowledge in this field please chime in.

 

PTR

[nucci]

I think you are correct about the debt issue. The Bills would be much higher if they could charge more for tickets and boxes. Wait until Jets/Giants move in to their new stadium and start collecting $250,000.00 per box. The Cowboys also. The revenue disparity is about to grow even more. My problem - Ralph's also - is that this money the Cowboys and Jet/Giants collect raises the cap, which is why Wilson fought so hard for more revenue sharing.

[lets_go_bills]

These rankings are based almost entirely on the teams' stadiums. So the reason we are near the bottom is because we have an aging stadium.

[In-A-Gadda-Levitre]

These rankings are based almost entirely on the teams' stadiums. So the reason we are near the bottom is because we have an aging stadium.

but that's a double-edged sword. we also have almost no debt because of it...

[marauderswr80]

Didnt Buffalo get 78 million for the Toronto Series not 7.8?

[PromoTheRobot]

Didnt Buffalo get 78 million for the Toronto Series not 7.8?

You are correct. $78M over 5 years, or $9.75 per year. Sorry for the mistake.

 

PTR

[Ray]

Good summary PTR.......it basically suggests what a lot of us have been saying all along.....that the finances of the Bills are not that bad. It does bother me when Ralph seems to suggest this team is losing 20M/year b/c the market is terrible. Although the team will never be a Dallas Cowboys they can do well and make a profit.

Like you suggested the big question mark occurs when Raplh passes on......hopefully a long time from now. And hopefully estate tax consultants have aided somewhat the transfer behind the scenes. Likely a consortium of owners would buy the team to keep it in Buffalo and I highly doubt it would go gor 851M especially in today's market. Are there banks willing to fork over 400M to finance half the deal the way the credit markets are nowadays? That debt service would certainly cut into about all profits of the team but that would assume that the revenues are flat which they are not. Season ticket sales are up, revenue streams are up and the team looks better. Plus there a multiple teams in the league barely selling out games with lackluster interest (Jacksonville, San Diego) that would be a lot better for takeovers---moves.

 

I'll gladly exchange a game or two a year to Toronto to collect the extra revenue stream....hey, if the schedule does go to 17-18 games a year Toronto may get another game a year some seasons. This is not a bad market. 8-9+ million people from Rochester to Toronto. Not exactly "small" market 60 miles each way from Buffalo, although Buffalo itself is small at about 1M people in Erie County.

 

And about Toronto permanently taking the team.....if NYJ and NYG cannot turn much of a profit do you think Rogers can buy a team for 1B, build a stadium for 1B and pay the NFL another 600+M to relocate the team? That's close to a 3B bet to acquire a team to squeeze out 10M in profits a year. That's less than 1% profit per year on your investment! So people do need to relax...I do not think the NFL will take away a team that routinely sells out when it hasn't fielded a playoff team in 8 years. What other markets could say or do that?

[nucci]

When has Ralph EVER seemed to suggest that the Bills lose $20M per year? His complaint is that teams make money off of the luxury boxes and suites that is not shared but still raises the salary cap.

[Ned Flanders]

My problem - Ralph's also - is that this money the Cowboys and Jet/Giants collect raises the cap, which is why Wilson fought so hard for more revenue sharing.

Anybody see the latest RealSports on HBO? The first segment on NY Giants' 2009 ticket prices? The PSLs, etc?

 

Is the bubble about to burst?

[nucci]

Anybody see the latest RealSports on HBO? The first segment on NY Giants' 2009 ticket prices? The PSLs, etc?

 

Is the bubble about to burst?

I hope so. I think PSL's are the worst thing owners have come up with.

[TheLynchTrain]

Forbe's list of NFL franchise values

 

The list is out and as expected the Buffalo Bills are near the bottom: 27th out of 32 NFL teams.

 

Now I'm not an economist or an MBA. Maybe someone else here can help dissect the numbers better, especially if I'm barking up the wrong tree. But If you look past the Forbes list of values and look at debt value, operating revenue, and operating income, the Bills appear to be one of the more robust teams in the league!

 

For example:

>The Bills are #6 in operating income, thanks to a low level of debt (ranks 5th lowest). Forbes does not indicate if Toronto monies are included in this figure. I'm going to assume not. So if you add the expected $7.8M annually, that brings the Bills up from $34.6M to $42.4M...which puts them at #3!! (Oakland #2 @ $46.2M, Dallas #1 @ $66.0M.)

 

>The Bills are tied at #7 with 6 other teams for growth in value, 9% in 2008. The NFL average is 6.9% growth. The teams that had the highest growth have or are building new stadiums.

 

>If you add $7.8M from Toronto, the Bills have virtually the same revenue as the Jets and Giants, but have considerably more operating income!

 

>The Bills rank 5th from the bottom, tied with 4 other teams for lowest revenue. However they are only 15% below the league revenue average of $204.3M. Again if we add $7.8M, the Bills revenue increases to $196.8M, good for #14!

 

So if I'm reading these numbers correctly, Buffalo is no where near as bad an NFL market as the media makes us out to be. While we aren't swimming in cash, the Bills seem to be in the middle of the pack revenue-wise, at least when Toronto monies are added in.

 

One more point: the present valuation is $821M, 15% below the NFL average of $957.4M. But the Bills are one of the more profitable franchises in the NFL. Debt seems to be the key. And the question is can a new owner carry a large debt load and still be profitable in Buffalo? Maybe, maybe not. But looking at the Jets and Giants, who currently carry the largest debt loads in the NFL, they barely make a profit even being in TV market #1. So would a new owner even be able to make a profit if the Bills were moved anywhere?

 

Again, anyone with more knowledge in this field please chime in.

 

PTR

 

 

Very good analysis. It says at the bottom of the article that the revenue and operating income are from the 2006 season. I guess thats why the Toronto money would not be included. My guess is that since 2006, we've sold like what, 4-8 thousand more season tickets? And the Bills are definately getting smarter and smarter every year when it comes to advertising and marketing. This shows in the 9% growth rate. So these numbers are definately lower than present numbers. The only problem is that, IMO, I'm sure other teams, especially dallas, Jersey A + B, and washington all have great PR and marketing depts too and have raised profits also. The new stadiums are a serious concern too. I read somewhere that each suite in dallas stadium raises the salary cap the next year 1000 bucks. This is rediculous.

[JinWPB]

With the exchange rate at 1.0735 we would actually be #24.

 

Sorry , I couldn't help it.

[PromoTheRobot]

I hope so. I think PSL's are the worst thing owners have come up with.

PSL's are horseschitt because you are basically giving the team owner a free stadium. But what if you could buy a PSL and actually own that piece of that stadium, and you would collect a royalty from any event held there? I could see offering that sort of deal, but it will never happen. Not when goobers with money are lining up to hand over their cash, no strings attached.

 

PTR

[BillsVet]

It's noteworthy that there are only 8 franchises that by 2010 will have stadiums 25 years or older. Those eight teams, Buffalo, Minnesota, Oakland, San Fran, San Diego, New Orleans, Kansas City, and Green Bay have an average team value of 914M. The league average is 1.04B, or about 125M above those eight teams. Teams by 2010 which will have parks younger than 25 have an average value of 1.082B, or approximately 170M more than teams with old fields in 2008 dollars.

 

As good as it is to have a low debt to value ratio as Buffalo has, it's apparent the NFL is pushing teams to build new stadiums to increase revenue. Many of those teams with higher debt to value ratio also have new stadiums, which helps reduce debt faster. Owners themselves realize this, and the disparity between rich and poor teams continues to grow. It's no wonder Ralph had no issues from owners about playing games in Toronto because the other 31 know that when teams at the bottom succeed, they all win. Revenue sharing alone does not solve the problem, and neither does a salary cap.

 

There's obviously a huge gap between franchises like Dallas and Washington versus Buffalo, and San Diego. Stadiums go a long way toward reducing that, but I can't see a new stadium built nearby anytime soon, especially with the owner's age and situation.

[Snorom]

don't worry. These mega stadiums with their licensing fees for the right to buy season tickets along with a sagging economy that continually removes money from the workers, will be the beginning of the a major decline for the NFL and sports in general.

 

The amount of money it takes to be a fan these days has already started a shift of kids being more interested in soccer then football. This will continue as families can no longer take the kids to see the game and kids will become disengaged with the NFL because they have limited or no access at all to the game... unless your wealthy. Wealthy kids don't make good football players.

[lets_go_bills]

Yeah, those licensing fees for seats is so incredible. What a ridiculous cash grab. What was the Giants one again? Like $1000 one-time fee? Insane.

[nucci]

It's noteworthy that there are only 8 franchises that by 2010 will have stadiums 25 years or older. Those eight teams, Buffalo, Minnesota, Oakland, San Fran, San Diego, New Orleans, Kansas City, and Green Bay have an average team value of 914M. The league average is 1.04B, or about 125M above those eight teams. Teams by 2010 which will have parks younger than 25 have an average value of 1.082B, or approximately 170M more than teams with old fields in 2008 dollars.

 

As good as it is to have a low debt to value ratio as Buffalo has, it's apparent the NFL is pushing teams to build new stadiums to increase revenue. Many of those teams with higher debt to value ratio also have new stadiums, which helps reduce debt faster. Owners themselves realize this, and the disparity between rich and poor teams continues to grow. It's no wonder Ralph had no issues from owners about playing games in Toronto because the other 31 know that when teams at the bottom succeed, they all win. Revenue sharing alone does not solve the problem, and neither does a salary cap.

 

There's obviously a huge gap between franchises like Dallas and Washington versus Buffalo, and San Diego. Stadiums go a long way toward reducing that, but I can't see a new stadium built nearby anytime soon, especially with the owner's age and situation.

A new stadium in Buffalo will not increase revenue. No one in Buffalo will pay a PSL and you can not raise the price of tickets and luxury boxes high enough to offset the expense of a new stadium.

[Kelly the Dog]

Sorry, but that link provided is an old list. It was dated Sept 13, 2007, and the figures were from 2006.

[buzzbait1965]

I just saw that real sports thing last night. the numbers were insane and I can't remember them all exactly but they were a lot higher than 1,000 dollars. They did say the Jets were holding like 27,000 seats for no PSL fees but you know where those are going to be.

 

There was a guy with yankee tickets on there. 4 season tickets in the area he sits in( very good seats) are going from 81,000 to 810,000 if I remember correctly. He was a very wealthy guy but nobody in his area is going to renew. He's had the tickets for like 30 years and they had the stubs from when he first started going to games the price differences were astounding.He said it will become a company owned area in the future.

 

If I see the show again tonight I'll have to write down the numbers and let you know. The numbers were so big and so numerous it was hard to keep them straight. All I know is that there aren't to many people with that kind of scratch to go to games. Pretty sad if you ask me. They are pricing the people who made those leagues into what they are today right out of the market.

 

They said Stub Hub is one of the worst things that ever happened to the fans. It gave the owners the info they needed to see what the market would bare as far as prices and the owners are now raising the prices to reflect what people are willing to pay for a ticket.

[GG]

Sorry, but that link provided is an old list. It was dated Sept 13, 2007, and the figures were from 2006.

 

Here you go - Forbes